Barriers to the development of SMEs in the Slovak Republic
Research background: SMEs make up an important segment of the economic system, not only in the national economy, but also throughout the EU, and their importance continues to grow. SMEs in Slovakia, according to the latest data of the European Commission, represent 99.9 per cent of all enterprises, constitute 70.7 per cent of jobs, and 61.2 per cent of value added in the economy. However, they are often confronted with market imperfections. SMEs frequently have difficulties in obtaining capital or credit, particularly in the early start-up phase. Their restricted resources may also reduce access to new technologies or innovation. Authors often deal with the impact of SME financing on their development. Madrid-Guijarro et al. (2016), Lee et al. (2015) claim that SMEs have difficulty in funding innovation and the worsening in general credit conditions has been more pronounced for non-innovative firms.
Purpose of the article: The main objective of the conducted research was to analyze the conditions for the development of small and medium enterprises (the SMEs sector) in Slovak Republic, whereas the specific objectives were: (1) to determine the terms for gaining external sources of financing for the development of SMEs, (2) to examine the resources for innovation development in the SMEs sector, (3) to find out if SMEs are considered to be a competitive advantage.
Methods: The research was conducted in the Slovak Republic in 2016. Participants were 193 Slovak companies that were classified as SMEs by the size class of employment. The research tool used for the study was the own questionnaire consisting of 38 questions and the demographics. The structure of the questionnaire allowed the authors to identify the group of questions concerning the most important conditions for the development of the examined sector referring to the business environment. The results were processed by chi-square method.
Findings & Value added: On the basis of the conducted research of the sector of SMEs , it can be concluded that a large group of companies have difficult access to external sources of financing and this refers both to the access to the European Union funds, grants, bank loans and other instruments of the financial market. However, it occurs that: (1) in Slovakia, the smaller the enterprise, i.e. the fewer employees it hires, the easier the access to external sources of financing, (1) innovative projects are realized from company profits or a loan, (1) problems in Slovakia in accessing external funds due to the complexity of the process of approval of applications and documents and strict criteria for the assessment of financial capacity.
Altomonte, C., Gamba, S., Mancuti,.L., & Vezzulli, A. (2015). R&D investments, financing constraints, exporting and productivity. Economics of Innovation and New Technology, 25(3). doi: 10.1080/10438599.2015.1076203.
Belitz, H., & Lejpras, A. (2016). Financing patterns of R&D in small and medium-sized enterprises and the perception of innovation barriers in Germany. Science and Public Policy, 43(2). doi: 10.1093/scipol/scv02710.
Bockova, N., & Zizlavsky, O. (2016). Innovation and financial performance of a company: a study from Czech manufacturing industry. Transformation in Business and Economics, 15(3).
Brancati, E. (2015). Innovation Financing and the role of relationship lending for SMEs. Small Business Economics, 44(2). doi: 10.1007/s11187-014-9603-3.
Brunswicker, S, & Vanhaverbeke, W. (2014). Open innovation in small and medi-um‐sized enterprises. Journal of Small Business Management, 53(4). doi: 10.1111/jsbm.12120.
Cincera, M, & Santos, A. (2016). Institute for development and international rela-tions. IRMO Occasional Papers, 1.
Gupta, P., Seetharaman, A., & Raj, J. R. (2013). The usage and adoption of cloud computing by small and medium businesses. International Journal of Infor-mation Management, 33(5). doi: 10.1016/j.ijinfomgt.2013.07.001.
Habánik, J., Kordoš, M., & Hošták, P. (2016) Competitiveness of Slovak economy and regional development policies. Journal of International Studies, 9(1). doi: 10.14254/2071-8330.2016/9-1/10.
Havierniková, K., & Srovnaliková, P. (2016). Selected categories of levies and their impact on economic results of small and medium-sized enterprises. Actual Problems of Economics, 11(185).
Chesbrough, H. W., & Appleyard, M. M. (2007). Open innovation and strategy. California Management Review, 50(1).
Kordoš, M. (2015). Interaction effects and impact of the EU regional policy within the strategy 2020. In 2nd international multidisciplinary scientific conference on social sciences & arts SGEM 2015. Volume II. Political sciences, law, fi-nance, economics & tourism. Sofia: STEF92 Technology Ltd.
Lee, N., Sameen, H., & Cowling, M. (2015) Access to finance for innovative SMEs since the financial crisis. Research Policy, 44(2). doi: 10.1016/j.respol.2014.09.008.
Love, J. H., Roper, S. (2015). SME innovation, exporting and growth: A review of existing evidence. International Small Business Journal, 33(1). doi: 0.1177/0266242614.
Madrid-Guijarro, A., Garcia-Perez-de-Lema, D., & Van Auken, H. (2016). Financ-ing constraints and SME innovation during economic crises. Academia-Revista Latinoamericana de Administracion, 29(1).
Masiukiewicz, P., & Nowak, M. (2012). Financial leverage models versus bank-ruptcy enterprises. Journal of International Scientific Publications. Economy & Business, 4(6).
Radas, S., Anic, I., Tafro, A., & Wagner, V. (2015). The effects of public support schemes on small and medium enterprises. Technovation, 38(1). doi: 10.1016/j.technovation.2014.08.002.
Reeg, C. (2013). Micro, small and medium enterprise upgrading in low- and mid-dle-income countries: a literature review. DIE (Discussion Paper), 15.
Slovak Business Agency (2015). Retrieved for http://www.sbagency.sk/en/slovak-business-agency
Spithoven, A., Vanhaverbeke, W., & Roijakkers, N. (2013). Open innovation prac-tices in SMEs and large enterprises. Small Business Economics, 41(3). doi: 10.1007/s11187-012-9453-9.
Teirlinck, P, & Spithoven, A. (2013). Research collaboration and R&D outsourc-ing: Different R&D personnel requirements in SMEs. Technovation, 33(4). doi: 10.1016/j.technovation.2012.11.005.
Vermoesen, V., Deloof, M., & Laveren, E. (2013). Long-term debt maturity and financing constraints of SMEs during the global financial crisis. Small Business Economics, 41(2). doi: 10.1007/s11187-012-9435-y.
Vojtovič, S., Navickas, V., & Gruzauskas, V. (2016). Strategy of sustainable com-petitiveness: methodology of real-time customers' segmentation for retail shops. Journal of Security and Sustainability Issues, 5(4). doi: 10.9770/jssi. 2016.5.4 (4).